Before choosing a program, check which rules may apply to you.
đ§ Check Your Eligibility âCanadian home buyers do not have a single government program that covers every stage of a purchase. Instead, several federal tools can help with saving, accessing existing funds, reducing tax or recovering GST/HST on eligible housing.
Some of the five options below can be combined. Others only apply to specific buyers or property types. Understanding that difference is more useful than simply looking for the program with the largest dollar figure.
First Home Savings Account (FHSA)
An FHSA is a registered account specifically designed to help eligible first-time buyers save toward buying or building a qualifying home in Canada.
It combines two useful tax features: eligible contributions can generally be deducted from income for tax purposes, while a qualifying withdrawal used for a first home is not taxable.
Who can open an FHSA?
To open an FHSA, the CRA requires you to be a qualifying individual. Among the main requirements, you must be a resident of Canada, meet the applicable age rules and qualify as a first-time home buyer under the FHSA definition.
For the home-ownership test, you generally cannot have lived in a qualifying home that you owned or jointly owned as your principal residence during the current calendar year or the previous four calendar years.
If you have a spouse or common-law partner, a home they own and in which you live can also affect whether you qualify to open the account.
Home Buyers’ Plan (HBP)
The Home Buyers’ Plan allows an eligible participant to withdraw money from an RRSP to buy or build a qualifying home.
When all of the HBP conditions are met, the qualifying withdrawal is not included as regular taxable RRSP income at the time it is withdrawn.
You generally need a written agreement to buy or build a qualifying home and must intend to occupy that property as your principal place of residence within one year after buying or building it.
The HBP normally has a first-time home buyer requirement, although special rules exist when the purchase is connected with a specified person with a disability.
FHSA + HBP can work together. The CRA confirms that an eligible buyer can make a qualifying FHSA withdrawal and also use the Home Buyers’ Plan for the same qualifying home, provided all conditions for both programs are satisfied.
Why the 89-day RRSP rule matters
A buyer should be careful about putting a large amount into an RRSP shortly before withdrawing it under the Home Buyers’ Plan.
CRA rules can limit the deduction for RRSP contributions made during the 89-day period immediately before an HBP withdrawal.
This does not mean every contribution made during that period becomes non-deductible, but the calculation can affect how much of those recent RRSP contributions you can deduct.
Home Buyers’ Amount
The Home Buyers’ Amount is a federal non-refundable tax credit available for certain qualifying home purchases.
An eligible taxpayer can claim a Home Buyers’ Amount of up to $10,000.
The home must be located in Canada and registered in the eligible buyer’s name or their spouse or common-law partner’s name under the applicable land registration system.
Generally, the buyer must meet the first-time home buyer rule: they must not have lived in another home owned by them or their spouse or common-law partner during the year of acquisition or the four preceding years.
There is an important exception for certain people who are eligible for the Disability Tax Credit, or where the home is acquired for the benefit of a related person who qualifies for that credit and the home is better suited to that person’s needs.
First-Time Home Buyers’ GST/HST Rebate
This is one of the most significant recent changes for Canadian first-time buyers purchasing or building qualifying new housing.
An eligible first-time buyer may recover up to 100% of the GST or federal portion of the HST paid on a qualifying home, subject to the program limits.
How the new first-time buyer rebate is calculated
For qualifying homes valued at $1 million or less, the federal rebate can cover up to 100% of the GST or federal portion of HST paid, up to the $50,000 maximum.
Between $1 million and $1.5 million, the maximum rebate is gradually reduced.
At $1.5 million or more, there is no federal First-Time Home Buyers’ GST/HST Rebate.
The first-time buyer definition for this rebate has some specific requirements of its own. Generally, the applicant must be at least 18, be a Canadian citizen or permanent resident and satisfy the applicable previous-home-ownership test.
GST/HST New Housing Rebate
The standard GST/HST New Housing Rebate existed before the newer first-time buyer rebate and should not be confused with it.
Depending on the situation, it can help an individual who buys a newly constructed or substantially renovated home, builds a home or carries out a substantial renovation for use as a primary place of residence.
Under the standard federal calculation, the rebate is generally 36% of the GST or federal portion of HST paid, up to $6,300.
The full standard rebate applies to qualifying housing valued at $350,000 or less. It is gradually reduced between $350,000 and $450,000 and is generally unavailable once the relevant value reaches $450,000.
Program 4 and Program 5 are related, but they are not the same rebate. The newer first-time buyer rebate can effectively provide additional federal GST/HST relief where its requirements are satisfied, including for qualifying homes above the standard new housing rebate’s usual price ceiling.
Compare the 5 programs side by side
| Option | What it does | Key 2026 figure | Before or after purchase? | First-time buyer focus? |
|---|---|---|---|---|
| FHSA | Tax-advantaged savings for a qualifying home | $8,000 annual room; $40,000 lifetime contribution limit | Mainly before purchase | Yes |
| Home Buyers’ Plan | Withdraw eligible RRSP money | Up to $60,000 | Around the purchase | Generally yes, with exceptions |
| Home Buyers’ Amount | Federal non-refundable tax credit | Claim amount up to $10,000 | After acquisition / tax filing | Generally yes, with disability-related exceptions |
| FTHB GST/HST Rebate | GST/HST relief on qualifying new first homes | Up to $50,000 | Connected to qualifying new-home purchase/build | Yes |
| New Housing Rebate | Recover part of GST/HST on eligible new housing | Up to $6,300 federally | New home / construction / substantial renovation | No |
Which programs can potentially be combined?
One of the most useful things to understand is that these programs are not necessarily alternatives to each other. They operate at different stages of a home purchase.
This does not mean every buyer can use all five options. Each one has separate eligibility rules.
Five mistakes worth avoiding
- Assuming FHSA room has been accumulating for years even though you never opened an FHSA.
- Treating the $60,000 Home Buyers’ Plan limit as a grant instead of an RRSP withdrawal that normally has a future repayment obligation.
- Assuming the $10,000 Home Buyers’ Amount means a $10,000 cheque from the government.
- Trying to use the First-Time Home Buyers’ GST/HST Rebate for an ordinary resale property that does not meet the new-housing requirements.
- Assuming the standard GST/HST New Housing Rebate has the same $1.5 million threshold as the newer first-time buyer rebate.
The meaning of âfirst-time buyerâ can change by program
One reason these programs can be confusing is that there is not one single first-time home buyer test that should be applied blindly to every program.
Several use a current-year plus previous-four-calendar-year look-back test, but the exact wording, relevant date, spouse or common-law partner rules, residency conditions and other requirements can differ.
The newer First-Time Home Buyers’ GST/HST Rebate, for example, also generally requires the first-time buyer to be at least 18 and be a Canadian citizen or permanent resident.
A practical way to approach the five options
- If you have not bought yet, check whether you can open and fund an FHSA.
- If you already have RRSP savings, review whether the Home Buyers’ Plan fits your situation.
- Before signing for a new build, check the specific GST/HST rebate dates and property requirements.
- Keep documents relating to the purchase, ownership and property because they may be needed for tax claims or rebate applications.
- When filing your tax return after an eligible purchase, review the Home Buyers’ Amount rather than assuming it is applied automatically.
- Check your province or territory separately because additional provincial incentives may exist outside these federal programs.
The best option is not necessarily the program with the highest headline amount. A useful home-buying strategy looks at when you plan to purchase, your existing FHSA and RRSP savings, your first-time buyer status and whether the property is a resale home or qualifying new housing.
Now check which of these rules may match your situation.
đ§ Check Your Eligibility âCRA â First Home Savings Account (FHSA)
CRA â Opening your FHSAs
CRA â Home Buyers’ Plan
CRA â HBP withdrawals and repayment rules
CRA â Home Buyers’ Amount, Line 31270
CRA â First-Time Home Buyers’ GST/HST Rebate
CRA â GST/HST New Housing Rebate
Federal program rules, limits and tax rules can change. Eligibility should be confirmed against the current official guidance before making a purchase, withdrawal or tax decision.
DR Ana Popescu is passionate about writing and providing readers with accurate information. She has experience writing articles about economics, financial planning, and personal loans, offering clear and easy-to-understand explanations. Her goal is to help readers make better decisions through useful and well-researched information.